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Putting a value on older machines

UGLYMRJ

Plastic
Joined
Nov 10, 2020
Looking for ideas on how to find a true value on older machines. One half of our business is buying out the other half. Trying to find the value of a Micromatic 740 has had almost no results. I've even contacted auctions and different machinery brokers across the country. With so many shops closing, most of these guys are wheeling and dealing CNCs worth a hell of a lot more than these old relics.... not much information there.

Any feedback is appreciated.
 
How much does it weigh?

I recently sold four CNC's from the early 80's to the late 90's. With no bites at what I thought were reasonable prices I called for a scrap quote and listed the machines for their value by weight. Surprisingly, I sold two of them immediately. Both working 3 axis VMC's were sold for scrap.

Interestingly scrap went up from the time I got the quote to the time I hauled them in so I could have actually got more had I just scrapped all of them.

#1 unprepared is currently 225/ton in my neck of the woods. Subtract about $600 per 21 tons for cost of hauling. Result is your value if you can load it.
 
I think Phils point is you can hang onto old machines forever trying to get "what they are worth....Im not giving them away"......options ,sell for scrap or store indefinitely.....you will end up scrapping them anyway......And yes ,Ive just scrapped 50 tons of machines ,and got A$350-400 a ton .....no need for transportation,just dump them into the scrapyards marel or hook lift bin,and forgo about $150 on a 8 ton load....When scrap prices are high ,like now,you may have a long wait to get a bin supplied.
 
Its a good feeling when a guy who s been nuisance offering half scrap price on a machine comes around and sees it on its end in a scrapbin......Which is when you apply company policy...."once in the bin its gone....no pullouts".....
 
Looking for ideas on how to find a true value on older machines. One half of our business is buying out the other half. Trying to find the value of a Micromatic 740 has had almost no results. I've even contacted auctions and different machinery brokers across the country. With so many shops closing, most of these guys are wheeling and dealing CNCs worth a hell of a lot more than these old relics.... not much information there.

Any feedback is appreciated.

What is your accountants opinion on a value?

May make a difference may not, but I would also speak to my accountant just to check.
 
accountants dont know shit! they will tell you the recaptcher value. You will also have to share 21% with the irs any price the machine brings, and thats not with the state tax of 6.75% in Montana...And if Biden gets his way it will be 28% plus state tax...You might be better off gifting it to a non profit...Phil
 
In owner-operator companies only, this may be useful.
It does not matter if the accountant says it has a potential 5000$ relic value for obscure rule x.

When the asset has been jettisoned for say 50-100$ as scrap, with a perhaps residual bookkeeping value of 80$ (200), the realised residual value is what You got for it.
If the tool was held on the books for 50.000$, and was realised at 100$, then 49.900$ will be booked as a loss.
This will reduce tax payments from any profits.

At a 30% tax rate, making 100.000 $ in profits, for a machine shop, this will save about 49.900$ in tax liability in profits, unless the company has enough other tax dodges to avoid income tax altogether or mostly avoid tax.
Small companies typically all pay taxes and don´t have such dodges.

The end result is if Your machine shop makes 100k$ per year profit, after your salary and benefits, selling off the old bit will reduce your taxes 15.000$ net, perfectly legally.

The big boys do/did exactly the same, when they took over old US trademarks and businesses, like Milwaukee, Craftsman, etc.
They used OPM stock market funds to buy the businesses, and monetised the land, assets, brands, and tax losses.


What is your accountants opinion on a value?

May make a difference may not, but I would also speak to my accountant just to check.
 
Old machines can be a boon to some folk. My entire shop is 80s and 90s era machine tools and I get great results every day. Yeah, they're slow, but they still make good parts and I don't owe a nickle on any of them.
Selling them? I'd probably give them away or scrap, but really, why? They're making money.
 
Yeah, exactly.
We have clients from 75 countries, typically 50+ countries per year, almost all in the 1% tax brackets.

Doing major operations, in real estate and other fields, with our advice.
With a client satisfaction rate and repeat rate of about 98%.

Several hundred nearing a thousand major operations done, with great success.
About 200M€ inward investments we helped succeed.

Em...
I suspect You personally have less than 500 operations done for millionaires and multi-millionaires, ..
for people from global backgrounds all over,
with endless sorts of issues we fix, which is what our other (non-machining) firm is for.

So I feel quite qualified to comment, on tax issues and other.
And I also personally helped fix issues for fortune 100 prime-line executives, about 50 times.

Now there is about 22 staff and associates, so I don´t aid in that anymore.
16 lawyers on staff speaking 7 languages, the premium accountancy and multi-jurisdiction tax advice, our office is the best in Barcelona, and the best in Spain, pretty much.

Web Server's Default Page
Wy wife, Raisa, is the founder and the other managing partner, of 2.

I´ve had business in the US, malta, china, mexico, sweden, singapore, uk, tunisia.

I thought Your snide-seeming comment as ill-advised,
incorrect,
and ill-informed,
and trust it was mostly based on a lack of information.

Personally, me and my wife come from Finland, with the nr1 education rate and health-care success in the world,
past 17 years, about nr 1 in education, varying sometimes 1-5, according to PISA scores, and we both personally scored in the 1% category in Finland, internally.

Our (other) business is advising foreign investors on tax matters and making their new business(es) in Spain work faster, as a landing platform.
And we are about the best in the world at that, and our hundreds of millionaire and billionaire and royal clients agree.

So, yeah, I comment on the US tax stuff.

IRS tax advise from Spain? what could possibly go wrong?...Phil
 
EXACTLY right.

Even as an ex. cisco router salesman and HAAS country sales manager, Spain,
what I always did, and the best (Hitec Spain) CNC providers always did, was actually look at the realities.
We always recommended what was best for the clients.

In endless corner cases manual machines can make good-to-excellent money, essentially forever.
Usually or mostly in limited markets or limited practical access.

Where old manual machines make good money, the market is typically limited or restricted.
When making more parts in the same time, or making them more accurate, wont significantly increase the demand for the parts.

Buying a new CNC machine will just cost 100k$ with tooling, and won´t really increase the top-line income significantly in those markets.

Converse.
I know a very Young guy who did the best business of all time, by buying a huge ultra expensive cnc, in big parts country.
Northern Spain, Basque country, a 3 m x 1.5 m lathe, Mitsubishi iirc.
He was soon swamped with orders, everything from drill or manhole covers up, size 120 cm x 4 cm thickness, 300 kg in mass, qty 200.

He worked his ass off, but in 11 months according to him he had almost all the lathe paid off.
No idea, but I think it cost about 1M€.

I, as HAAS Spain, no-quoted about 10% of customer proposals.
And we told them why they won´t work well enough,
in our estimation,
and we cannot risk our rep. providing tools for their project.


Old machines can be a boon to some folk.
My entire shop is 80s and 90s era machine tools and I get great results every day. Yeah, they're slow, but they still make good parts and I don't owe a nickle on any of them.
Selling them? I'd probably give them away or scrap, but really, why? They're making money.
 
Old CNC machines have almost no value over scrap. The reason is not as if they are worn out or not repairable mechanically. It is because the controls cannot be repaired or economically be replaced. The effective life of a CNC machine is rarely longer than 15 years. This is as opposed to manual machines that maintain good value for 100 years. This is not just an issue for the machine tool industry. I can still buy parts for 1951 Ford of 1953 Chevy, but try buying a replacement ECU for a 20 year old Mercedes. We live in a disposable world today and electronics and software are both a huge enabler and a bane to society. So, in answer to the OP the value depends largely if it's manual or CNC.
 
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In mergers ,company reorganizations,or takeovers ,the accountants normally tell you what the machine is worth to give maximum tax advantage ,and that is the figure you go with......Its of no consequence if the machines is scrapped after the dust settles on the deal......Sometimes a fortuitous circumstance comes your way.....as for instance in 1996 ,when the government here legislated the infamous "gun confiscation".......the govt also had the bright idea of buying out gunsmiths, firearms makers,and allied trades.....thinking such would be a permanent reduction in guns...many people who had dabbled in a bit of gun work got together a collection of old machines,in my case,old lathes, capstan lathes and a couple of horizontal mills......and in exchange for you surrendering the old machines,bought you out at YOUR valuation.....Happy times.....Literally hundreds of millions were wasted buying old junk machines and guns and scrapping them
 
My machines are either Fanuc, or Okuma controls, and electronic parts are still available. Many times the "replacement" parts are a huge technology upgrade over the factory ones from the 80s.
 
To me, if machine tool is making good parts, holding size, and giving good service, I just cant see throwing it away. Yesterday I was cranking out very nice parts on a 1983 Okuma and a 1985 P&W/Hamai. Slow, a little dirty, but still making good parts.
 
Old CNC machines have almost no value over scrap. The reason is not as if they are worn out or not repairable mechanically. It is because the controls cannot be repaired or economically be replaced. The effective life of a CNC machine is rarely longer than 15 years. This is as opposed to manual machines that maintain good value for 100 years. This is not just an issue for the machine tool industry. I can still buy parts for 1951 Ford of 1953 Chevy, but try buying a replacement ECU for a 20 year old Mercedes. We live in a disposable world today and electronics and software are both a huge enabler and a bane to society. So, in answer to the OP the value depends largely if it's manual or CNC.

While old CNC value often is tied to scrap value your reasons for why that is are totally wrong. Any Fanuc control (most CNC controls made in the last 45 years) are fully supported. There is nothing you cannot buy or have repaired in a Fanuc control since the beginning. That aside they don't fail very often.

All the CNC's I have scrapped have worked good to great. Good enough to hook up and make money with. Usually just the fact it looks old is enough to keep it from selling.

I recently looked at a late 80's Makino HMC that the seller was asking a price way out of line for comparable age equipment. The damn thing was quite literally in as-new condition, like you went back in time. It was regularly used in production, still held tenths and if I was working on it and dropped a sandwich down inside the column I would pick it up and keep eating it. That's how clean it was. We had a deep discussion about price and the machines value. They asserted that that old Makino still generated over $100k in profit annually for them so it could for anyone else and therefore it was a giveaway priced around what a new Kia costs. I countered that regardless of profit potential this model of Makino was long out of mainstream production and if/when it breaks down Makino will not have the parts on the shelf for it. It will be repairable, but there will be a downtime cost. That downtime makes it a non-starter for most buyers.

So, the reason fine older CNC's are cheap isn't lack of support, it's the timeframe for repairs. Things like spindles and hydraulic pumps must be sent out for repair, not replaced. Solenoid valves and encoders are obsolete and maintenance has to be smart enough to make a quality repair with modern equivalents when required. The machine could sit for 2 weeks.
 
Completely apart from a machines usefullness,are the attitudes of management,financiers,bankers,and insurers.....not to mention operators......the whole system is geared to new ,new cars,new houses ,new machines.
 
There are so many things other than the "value" of the machine that can affect the transaction. If it's old, not working well, needs a lot of effort to rig-out, transport and rig-in, if it's getting in the way of other & better business for you (you're making less money with it taking up space) then I would say it can be worthwhile to pay someone to take it. If it's in place (i.e. same place from one business to the other, as you mentioned), highly-operational, serviceable, processes efficiently, lots of tooling & spare parts, then it can be worth more than the "sellable value".

I know that doesn't exactly answer your question but hopefully it helps you realize the actual condition. One other thing I'll say is that it could be one of those circumstances where it can be a good justification to charge $1 for it (required for legal circumstances as sometimes you just can't give things away). The main reason would be that it's getting in the way of the existing business and the value to the new business balances out.

Good luck,
The Dude
 








 
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